Genesco Inc. reported net sales were $335 million for the second quarter ended August 1 compared to $353 million in the second quarter of Fiscal 2009. Comparable store sales in the second quarter of Fiscal 2010 decreased by 8%. Comparable store sales in the Journeys Group decreased by 9%, the Hat World Group decreased by 2%, Underground Station decreased by 19%, and Johnston & Murphy Retail decreased by 16%.
Adjusted for the listed items in both periods, the loss from continuing operations was $0.4 million, or 2 cents per diluted share, for the second quarter of Fiscal 2010, compared to earnings from continuing operations of $3.6 million, or 18 cents per diluted share, for the second quarter of Fiscal 2009. For consistency with Fiscal 2010's previously announced earnings expectations, which did not reflect the listed items, the company believes that disclosure of earnings from continuing operations adjusted for those items will be useful to investors.
Robert J. Dennis, president and chief executive officer of Genesco, said, “We were pleased with our bottomline performance for the quarter, even though sales remained choppy. August is off to a better start, with comparable sales through August 24 down by only 4%, despite a slightly delayed back to school in key regions related to a later than usual Labor Day.
“Looking ahead, while visibility with regard to the economic climate is still quite limited, we remain cautiously optimistic about the second half of Fiscal 2010. Sales comparisons continue to moderate throughout the period, and we expect positive comps in the fourth quarter. We are buying accordingly.
“Based on our sales expectations, we believe that we should be able to achieve our previously announced baseline scenario of earnings per share in the $1.70 to $1.80 range for the year.”
GENESCO INC.
Consolidated Earnings Summary
Three Months Ended Six Months Ended
Restated * Restated *
In Thousands August 1, August 2, August 1, August 2,
2009 2008 2009 2008
Net sales $334,658 $353,138 $705,024 $710,073
Cost of sales 164,713 171,814 345,857 347,354
Selling and
administrative
expenses 168,598 173,420 349,967 353,466
Restructuring and
other, net 3,320 3,261 8,293 (198,577)
(Loss) earnings
from operations (1,973) 4,643 907 207,830
Loss on early
retirement of debt - - 5,119 -
Interest expense,
net 1,862 2,873 4,945 5,818
(Loss) earnings
before income taxes
from continuing
operations (3,835) 1,770 (9,157) 202,012
Income tax (benefit)
expense (1,172) 7,161 (891) 77,963
(Loss) earnings from
Continuing
operations (2,663) (5,391) (8,266) 124,049
Provision for
discontinued
operations (59) (5,361) (218) (5,454)
Net (Loss)
Earnings $(2,722) $(10,752) $(8,484) $118,595
* Fiscal 2009 results restated as a result of retroactive application of
FSP APB 14-1.
Earnings Per Share Information
Three Months Ended Six Months Ended
In Thousands Restated Restated
(except per August 1, August 2, August 1, August 2,
share amounts) 2009 2008 2009 2008
Preferred dividend
requirements $49 $50 $99 $99
Average common
shares - Basic
EPS 21,798 18,513 20,326 19,782
Basic earnings
(loss) per share:
Before discontinued
operations ($0.12) ($0.29) ($0.41) $6.27
Net (loss)
earnings ($0.13) ($0.58) ($0.42) $5.99
Average common and
common equivalent
shares - Diluted EPS 21,798 18,513 20,326 24,508
Diluted earnings
(loss) per share:
Before discontinued
operations ($0.12) ($0.29) ($0.41) $5.15
Net (loss)
earnings ($0.13) ($0.58) ($0.42) $4.93
GENESCO INC.
Consolidated Earnings Summary
Three Months Ended Six Months Ended
Restated Restated
August 1, August 2, August 1, August 2,
In Thousands 2009 2008 2009 2008
Sales:
Journeys Group $148,592 $160,960 $325,439 $329,722
Underground
Station Group 18,561 23,597 45,289 52,601
Hat World Group 108,830 102,169 207,634 189,906
Johnston & Murphy
Group 39,054 44,014 78,384 90,585
Licensed Brands 19,402 22,145 47,953 46,893
Corporate and
Other 219 253 325 366
Net Sales $334,658 $353,138 $705,024 $710,073
Operating Income
(Loss):
Journeys Group $(3,159) $2,388 $2,354 $7,686
Underground Station
Group (3,789) (3,038) (4,239) (4,019)
Hat World Group 10,526 11,454 17,050 15,179
Johnston & Murphy
Group (459) 2,994 (302) 6,677
Licensed Brands 1,987 2,091 5,604 5,646
Corporate and
Other* (7,079) (11,246) (19,560) 176,661
(Loss) earnings
from operations (1,973) 4,643 907 207,830
Loss on early
retirement of
debt - - 5,119 -
Interest, net 1,862 2,873 4,945 5,818
(Loss) earnings before
income taxes from
continuing
operations (3,835) 1,770 (9,157) 202,012
Income tax (benefit)
expense (1,172) 7,161 (891) 77,963
(Loss) earnings from
continuing operations (2,663) (5,391) (8,266) 124,049
Provision for
discontinued
operations (59) (5,361) (218) (5,454)
Net (Loss) Earnings $(2,722) $(10,752) $(8,484) $118,595
*Includes $3.3 million of other charges in the second quarter of Fiscal
2010 which includes $3.4 million in asset impairments offset by a $0.1
million gain from other legal matters and includes $8.3 million of other
charges in the first six months of Fiscal 2010 which includes $7.9
million in asset impairments, $0.3 million in other legal matters and
$0.1 million for lease terminations.
Includes $3.3 million of other charges in the second quarter of Fiscal
2009 which includes $2.4 million in asset impairments, $0.6 million for
lease terminations and $0.3 million for other legal matters and includes
$198.6 million credit in the first six months of Fiscal 2009 of which
$204.1 million were proceeds as a result of the settlement of
merger-related litigation with The Finish Line and its investment bankers
offset by $3.6 million in asset impairments, $1.1 million for other legal
matters and $0.8 million for lease terminations. The second quarter and
six months of Fiscal 2009 also included $0.3 million and $7.6 million,
respectively, of merger-related expenses.
